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Uncertainty Over Water Source for Tesla and Corporate Giants in Reno

No one seems to know how much water a massive desert industrial complex will ultimately require. But treated urban wastewater may help protect the imperiled Truckee River as more big companies move in.

Mustangs graze Thursday, June 24, 2015, on the open range at the Tahoe Reno Industrial Center about 15 miles east of Sparks, Nev., along U.S. Interstate 80 near where Tesla Motors is building a $5 billion Gigafactory to produce batteries for its electric cars. The company has never revealed how much water the factory requires. A draft agreement has been reached to deliver treated wastewater to the site from the Reno-Sparks area.Scott Sonner, AP

Just 12 miles east of Reno, Nevada, across a swath of brown and barren desert hills, some of the largest corporations in the U.S. are forming a new metropolis. Behemoths of manufacturing, retailing and computing are rushing to build new warehouses, data centers and factories at an industrial complex billed as the largest in the world.

The Tahoe Reno Industrial Center, or TRIC, sprawls across 107,000 acres of Storey County, a wedge of desert mountains and plains just east of the Reno metropolitan area. Tesla, Google, Ebay and Wal-Mart are some of the corporate luminaries that have bought in, with 11 million sq ft of pancake-flat industrial buildings already occupied. That’s not even half the total that will eventually be built here.

It’s a modern-day land rush that begs an important question: Where will all the water come from to serve these corporate ambitions?

Surprisingly, no one knows yet. Even the founders of the complex don’t know how much water their powerful tenants will eventually require.

“I don’t have any estimate on water needs from any of the companies at this point,” said Lance Gilman, TRIC’s director, who is also an elected Storey County commissioner. “You gotta set the crystal ball on the table and take your best guess and go for it.”

A satellite image of the Tahoe Reno Industrial Center in Nevada, with the Truckee River and Interstate 80 at the top, and the Tesla Gigafactory in the lower right. (Image Courtesy Google Maps)

Tesla, the wunderkind electric-car builder, began producing lithium-ion batteries this year at its Gigafactory on the site, which the company calls the “biggest building in the world.” In just three years the factory has grown to 1.9 million sq ft and may eventually reach 10 million.

Yet Tesla has never revealed how much water its Gigafactory might need. And Nevada officials apparently never bothered to ask, despite twisting arms for months to assemble a $1.4 billion incentive package that lured Tesla to the state.

“I’ve never heard a firm number,” said Jason King, Nevada’s state engineer, whose job is to oversee all water rights in the state.

TRIC is serving tenants from groundwater wells. An extensive on-site water recycling system stretches this supply. It also holds water rights in the Truckee River, which flows adjacent to the complex. But those rights are restricted during drought conditions, which are becoming increasingly common. Gilman acknowledges a more reliable long-term water supply is needed.

In recent weeks, a solution has emerged: Reno and Sparks have agreed to transfer 4,000 acre-feet per year of treated urban wastewater to the industrial complex. This wastewater is currently discharged from the regional sewage treatment plant into the Truckee River, sometimes with undesirable effects on water quality because the effluent is heavy with nitrates, said Reno City councilman David Bobzien.

In return, TRIC and the state of Nevada would relinquish an equivalent amount of Truckee River water rights. This could result in a net water quality benefit because the river water – left instream – would replace treated wastewater now discharged to the river.

The price TRIC will pay for the wastewater has yet to be determined.

Bobzien said the agreement is a positive development for the region, because it ensures the industrial center can continue growing without impacting the Truckee River. He also said the deal has come a long way from the first proposal offered by TRIC and its tenants, which “wasn’t well received” by many in local government.

“The initial proposal was, ‘Hey, you guys pay for some infrastructure, build us a pipeline, and we’ll take all the wastewater off your hands.’ As if it was going to be this wonderful thing for us,” Bobzien said. “Overall, the concept is in a much better place now.”

Most of the water that serves the Reno-Sparks metro area comes from the Truckee River. This ribbon of Sierra Nevada snowmelt begins at Lake Tahoe and ends at Pyramid Lake, a vast saline oasis in the desert belonging to the Pyramid Lake Paiute Tribe.

The tribe and numerous agencies have been working for decades to restore rare fish to the lake and the river that feeds it, including Pyramid Lake Cui-ui and Lahontan cutthroat trout. And for 90 years, a federal watermaster has overseen the river to make sure every drop is used wisely.

As a result, new demands on the Truckee River are viewed with broad concern, including TRIC’s 4,000 acre-feet of instream water rights.

“Ever since European settlement, we’ve been using and abusing that river,” said Mickey Hazelwood, Truckee River project manager for the Nature Conservancy, which has led an ambitious restoration effort on the river for 15 years. “What buildout will look like for that industrial center, nobody really knows.”

The deal to share treated wastewater could alleviate these concerns.

The draft agreement would give TRIC access to 4,000 acre-feet of treated wastewater annually for 30 years, with two 20-year extensions available. TRIC will have to spend about $35 million building a 10-mile pipeline to access the wastewater, plus another $30 million for onsite improvements to manage and distribute the water to its tenants.

Gilman said the effort is worth it, because a reclaimed wastewater supply would be “absolutely secure.”

“We do know there will be a significant need for the reclaimed water,” he said. “It’s as secure as you can get, because we’re taking it out of a resource stream that’s coming from all the development in the Reno-Sparks market area.”

Tesla is the star tenant at TRIC – and the biggest tenant. It also is certainly one of the largest water users.

Jason King, the state engineer, said he heard “very early in the process” of luring Tesla to Nevada that the company could require as much as 2,500 acre-feet of water per year for its battery manufacturing at TRIC. If true, that’s almost half the total annual groundwater supply at the complex (5,400 acre-feet, according to Gilman) being absorbed by a single tenant.

Support beams are lowered into position during construction of the Tesla Motors, Inc., Gigafactory in July 2016 at the Tahoe Reno Industrial Center. The factory has now reached 1.9 million sq ft and this year began producing batteries for Tesla electric cars. The company claims it’s the largest building in the world and may eventually reach 10 million sq ft. (Rich Pedroncelli, AP)

“It wasn’t clear to me at the time whether that’s once the Gigafactory is up and running, or whether it includes construction water,” King said.

Tesla officials declined to comment.

The Reno City Council is set to review the wastewater deal at its meeting Aug. 23, followed by the Sparks City Council in September. The two cities jointly operate the regional sewage treatment plant that produces the wastewater supply.

There are many details yet to be revealed. One of the most important concerns is the swap of treated wastewater for Truckee River water rights.

Although the wastewater sometimes exceeds nitrate limits allowed in the river, Bobzien said, it still represents an important component of overall Truckee River flows in such an arid environment.

The treated wastewater flow helps sustain fisheries. It also helps sustain water elevations in Pyramid Lake, which has been shrinking for decades as urbanization taps into the Sierra snowmelt that would otherwise reach the lake.

So if 4,000 acre-feet of treated wastewater is pulled out of the river, will the traded water rights replace that in equal measure? That remains to be seen.

Gilman, for instance, said the Truckee River water rights TRIC is contributing to the deal are not currently being tapped. Which means this water is already in the river, and will not replace the diverted wastewater.

“We’re actually not replacing water, we’re leaving what we could be taking in the river,” Gilman said.

For reasons like that, the Paiute Tribe remains skeptical of the deal. The tribe depends on Truckee River flows to sustain Pyramid Lake, the last remnant of a vast inland water body that has been sacred to its people for millennia.

“The main concern is that the river remain whole,” said Donna Noel, the tribe’s natural resources director. “We haven’t seen any details so far.”

The Nature Conservancy also remains wary of the agreement until more information emerges, said Hazelwood. The nonprofit has invested $27 million in Truckee River restoration projects over the past 15 years, including some immediately adjacent to the TRIC site.

“The folks at the industrial center have been good neighbors to our restoration work,” he said. “I wish we knew enough to know where we as an organization stand on this.”

One thing the negotiations have already achieved is enlightening Reno and Sparks to the potential of their treated sewage effluent. Bobzien said it could be decades until area residents are ready to consider recycling that effluent to use as a drinking water resource, as other communities have done. But it now seems like a possibility, at least.

“I think many in local government quickly realized the wastewater effluent – while it is a problem and a liability to us in terms of our discharge requirements – also has a value,” he said.

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